Although Monday’s modest rally could be the start of a more significant thrust, I wouldn’t bet on it.  Look at the DJIA chart below and you can see why. Although the blue chip average recouped an opening hour deficit and then some, its intraday peak failed to surpass the 12447 high recorded last Friday. Usually, when the bull means business, it will take out some prior peak visible to the left of it. Moreover, the more obscure and seemingly insignificant the peak, the more important and reliable it often proves to be with respect to the bigger picture. This is a manifestation of what I call the “look-to-the-left” rule, and it often foreshadows strength or weakness in stocks, indexes and averages. Under the circumstances, I doubt that yesterday’s snap-back recovery will prove to have been the rally that ignited stocks in 2007.

(Click on chart to enlarge)

Dead Birds in Austin

A bunch of dead birds found in Austin didn’t make headlines, but it did capture the attention of our bird flu correspondent, Erich Simon. Here’s his worst-case take on this potentially important “little” story:

“Police just closed ten blocks of downtown Austin, Texas after the discovery of ‘dozens’ of dead birds! Viral tests to determine Avian Influenza to ‘take weeks.’ An obvious stall. Possible corroboration of my appraisal that HP H5 will arrive from the south.

“Or is it an airborne vapor contamination that dropped the birds in mid-flight? This when a deadly toxic, wide-area vapor is just now circulating in Sugarland, Texas, and a C4 bomb scare in Miami and these after a HUGE vapor cloud enshrouded upper New Jersey and New York City this morning, of unknown and suspicious origin, prompting thousands of 911 dial-ups.

“Is this the beginning of a coordinated attack? Right after the Saddam execution? Is this a cover story for the impending stock market sell-off, implosion? The deflationary harbinger?

“Time will tell, but the Austin bird die-off is very incriminating and not something the establishment can easily steer around. There was also a bird die-off in West Virginia..”

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London Seminar

A Hidden Pivot seminar in London appears likely, judging from the strong initial response.  If you’re interested in attending a two-day class there, probably sometime in the spring of 2007, please let me know via e-mail, including your contact information. The cost would be $1,500 USD.